member firm(redirected from Member Firms)
Used for listed equity securities. Brokerage firm that has at least one membership on a major stock exchange even though, by exchange rules, the membership in the name of an employee and not of the firm itself.
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A broker-dealer firm in which at least one of the principal officers is allowed to trade on the floor of an exchange. To become a member, one needs to purchase a membership or a seat on the exchange, which can be very expensive. There are usually a set number of memberships to an exchange; for example, on the New York Stock Exchange, there are 1,366 seats, which may cost up to $1 million each, and which may be bought or sold to different firms. Most exchanges do not recognize member firms, only individual members; that is, they consider members to be the brokers or dealers on the floor, rather than the firms they represent.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A securities firm with officers or partners who are members of an organized securities exchange. National brokerage firms are generally members of a number of organized exchanges. Organized exchanges have established standards of conduct and financial conditions. See also ABC Agreement.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.